Academic

IS IRELAND facing a house price collapse? ?It?s terrifying to contemplate that the federal governme?

By Glenn Reynolds

IS IRELAND facing a house price collapse? “It’s terrifying to contemplate that the federal government is now, for all intents and purposes, the source of nearly all the mortgage origination in the United States. Doubly so for a libertarian, of course–but it’s also terrifying to contemplate what the market would look like without those interventions. Would other sources of mortgage finance exist? And if not, what’s the value of a house in a market that has suddenly gone to all-cash deals?”

It’ll be less. If — as I think we should — we return to a situation where 20% down is the norm, it’ll be less, too. though not as much less. But the value of a house in a funny-money economy isn’t sustainable, which means that it’ll be less, too, eventually. Reality bites.

Plus, from the comments: “You do realize that the Great Depression and WWII resulted from ignoring Mellon’s advice, right?”

Full post as published by Instapundit.com on November 09, 2010 (boomark / email).